Download History of modern Europe 6

History of Europe
1
HISTORY
Subject
:
History
(For under graduate student)
Paper No.
:
Paper-VI
History of Modern Europe
Unit No. & Title
:
Unit-3
Europe between 1914 & 1945
Lecture No. & Title
:
Lecture-7
Europe 1925 – 1935: World
Economic Depression
FAQs
1.
Which two features of economic liberalism ended
with the Great Depression?
The Great Depression marked the end of free trade,
which gradually gave way to protectionist economies.
Secondly the practice of valuing currencies against gold
standards came to a close.
History of Europe
2.
2
What was the status of the American economy
after the Great War?
At the end of the Great War the United States emerged
as the world’s largest economic power. It was the
largest industrial power as also one of the world’s
largest agricultural exporters.
3.
What initiated the consumer durable boom in
America?
When the Great War ended, the demand generated by
the war subsided but agricultural production in the
United States was not curtailed proportionately. Surplus
agricultural products were available in the market and
food prices began to slump. With falling food prices
there was increase of disposable income and the
American consumer began to enter the market and
generate a consumer boom.
4.
How did the consumer boom in the United States
affect the agriculturalists?
As
agricultural
prices
kept
going
down,
the
agriculturists who had borrowed in order to invest
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either in agricultural production or for the purchase of
consumer durables began to find it difficult to service
their debts. This led to a credit squeeze and the
availability of easy credit declined thereby affecting the
agriculturists adversely.
5.
What were the two ways in which American
capital was invested in Europe?
Investment made by the American private and public
sector units in the European banks, came in two forms:
1) capital that was invested by the Americans was
simply left in the European central banks to give up the
feeling of security deposit growing up, so that the bank
would be able to lend for industrial recovery.
2)
American bankers chose to go for direct investment in
industrial ventures which were invested for long term.
6.
What was the significance of the Hawley-Smoot
Tariff Act?
The Hawley Smoot Tariff Act 1934 sponsored by United
States Senator Reed Smoot and Representative Willis C
Hawley raised United States tariffs on over twenty
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thousand imported goods to almost sixty per cent. At
first there was some amount of success as factory
payrolls,
and
industrial
production
increased
appreciably. But in the long run the consequences
proved to be unfavourable as it brought retaliatory tariff
acts by other countries and the American trade started
suffering a decline thereby intensifying the economic
depression.
7.
What was the economic fallout of the Depression?
The
economic
fallout
of
the
burgeoning economic nationalism.
Depression
was
a
Following the lead
given by the Hawley-Smoot Act in USA, most of the
countries had thrown up high tariff barriers to protect
their own industries. Europe now witnessed a period of
trade war within itself as also with the rest of the world.
This was the first phase of the end of free trade
principles, culminating in the Import Duties Act of 1932
in Britain, which had been the bastion of the free trade
doctrine in the 19th century
History of Europe
8.
What
5
was
the
significance
of
the
Hoover
Moratorium?
The Hoover Moratorium declared by President Hoover in
July 1931 froze obligations of all nations to the USA for
a year. This moratorium was directed by US interests,
since bankrupt states could not clear debts. It was
nevertheless a bold acknowledgement of the linkage
between war-debts and Europe's financial instability.
France agreed to stoppage of German reparations for
the first time on condition of payment of interest on the
payment thus deferred.
9.
Why were the London Naval Conferences of 1931
and 1933 convened?
In the 1930’s the general idea was that the solution to
the economic crisis lay in a balanced budget. In order to
do so it was realized that military spending ought to be
curtailed. This was the reason for convening the London
Naval Conferences. It was agreed at these meetings
that all offensive armaments had to be foregone,
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10. Why was the Pound Sterling taken off the gold
standard?
The Pound Sterling was taken off the gold standard due
to the conviction, that if the value of Pound fell, British
goods
would
become
cheaper
and
competitive
in
comparison with any other economies that it would be
dealing with.